Mumbai, July 7 -- Ahmedabad and neighbouring Gandhinagar have become the first Indian cities to implement a formal increase in property prices after an association of developers announced hikes this month. The move was coordinated by the Ahmedabad chapter of the Confederation of Real Estate Developers of India, which organised a meeting of more than 400 developers before deciding on revisions. The association delayed action until June 30 to protect buyers but has proceeded in response to rising input costs and supply disruptions linked to the West Asia crisis.
The Ahmedabad chapter put the increase between five per cent and 10 per cent depending on the stage of construction and advised developers to assess inventory and costs before implementation. The chapter noted that margins are slim in the city and that the rise will affect ready-to-move, under-construction and future projects, thereby impacting all buyer segments. Developers in Vadodara and Rajkot have signalled individual hikes and the latter is planning a meeting within a week to consider a joint decision.
Industry data show that Ahmedabad hosts super premium luxury stock priced at upwards of Rs 250 million (mn) for certain projects, while rates for a three-bedroom flat can start at about Rs 6.5 mn based on area, location and amenities. There is an estimated inventory of 15,000 ready-to-move-in units, most of which are in Ahmedabad. The chapter noted that around 1,400 of roughly 2,000 developers in the city are registered with the association, which contributed to the coordinated approach.
Developers attributed the revision to shortages of key materials and disruptions caused by the Middle East conflict, which have pushed prices of several construction inputs up by 30 per cent to 50 per cent and constrained supplies. Labour shortages linked to fuel and logistical issues have added to project delays and prompted representations to government and RERA bodies for timeline extensions. The association estimated that supply chains may take at least nine to 12 months to normalise and said it will continue to review the market and consider further adjustments if required.
Published by HT Digital Content Services with permission from Construction World.